UnitedHealth Group Is Leading the Way on the Upside

UNH has moved up strongly from its March nadir so traders and investors should approach from the long side.

Unitedhealth Group (UNH) has broken out on the upside with a new high for the recent move up from the March low. Let's put on our mask and gloves and check out the charts and indicators to see if this rally can continue.

In this daily bar chart of UNH, below, we can see that prices sprinted higher today to retest the declining 50-day moving average line and the gently declining 200-day moving average line. So far prices have stopped short of a potential resistance area or zone from $270 to $305.

The On-Balance-Volume (OBV) line made a modest or slight saw-toothed decline in February and March but it looks like it is improving again. A rising OBV line is a sign that more aggressive buyers have returned.

The Moving Average Convergence Divergence (MACD) oscillator has crossed to the upside for a cover shorts buy signal.

In this weekly bar chart of UNH, below, we can see that prices broke the lows of 2019 but it did not precipitate further weakness. Prices quickly reversed to the upside. Trading volume increased and the weekly OBV line only made a slight dip the past two months.

The MACD oscillator on this longer time frame is poised to cross below the zero line for a sell signal but at the same time it is narrowing so any sell signal may be short in duration.

In this daily Point and Figure chart of UNH, below, we can see how the recent trade at $258.30 was a fresh upside breakout. A potential longer-term price target of $346 is indicated.

Bottom line strategy: Unlike some businesses and industries that may be permanently altered by our new stay at home economy, healthcare will be needed more than ever. UNH has moved up strongly from its March nadir so traders and investors should approach from the long side. Risk a close below $215 for now. $300 and $345 are our price targets.

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